The goldsmith analogy is spot-on for explaining fractional reserve banking in plain language. Werner's empirical test basically confirmed what people been suspecting for decades but the system benefits from keeping obscure. My uncle worked at a regional bank in the 80s and he'd always say the real magic trick was convincing everyone that ledger entries equal stored value instead of just... new ledger enties.
Thanks for this Sean. And for taking on contributing to our community via your loan with Desjardins. May the mortgage pressure not maim your values or spirit.
The goldsmith analogy is spot-on for explaining fractional reserve banking in plain language. Werner's empirical test basically confirmed what people been suspecting for decades but the system benefits from keeping obscure. My uncle worked at a regional bank in the 80s and he'd always say the real magic trick was convincing everyone that ledger entries equal stored value instead of just... new ledger enties.
Thanks for this Sean. And for taking on contributing to our community via your loan with Desjardins. May the mortgage pressure not maim your values or spirit.
Fascinating history lesson!